The Asian Development Bank (ADB) has upgraded its growth forecast for the Philippines this year, following the relaxation of the coronavirus disease 2019 (COVID-19) mobility restrictions in the country, the expansion of the COVID-19 vaccination program and a rebound in investment and household consumption.
According to the Asian Development Outlook (ADO) 2022 Supplement released yesterday, the Philippine economy will grow at least 6.5 percent in 2022, up from the bank’s April forecast of 6 percent.
ADB’s updated forecast is at the lower end of the Development Budget Coordination Committee’s growth assumption of 6.5 to 7.5 percent for 2022.
“The growth forecast for the Philippines is raised… for 2022 on a stronger-than-expected Q1 performance, underpinned by rebounds in investment and household consumption.
Wider COVID-19 vaccination coverage and relatively mild health impacts from the Omicron variant allowed the economy to reopen further,” the ADB report said.
“Mobility data across several activities, including work and recreation, are now back to pre-pandemic levels. Large public infrastructure projects are underway, and private sector indicators, such as the PMI (purchasing managers’ index), industrial production and imports, continue to expand,” it added.
ADB said downside risks to growth in the second half of 2022 may come from sharper-than-expected slowdowns in major industrial economies, possible sustained elevated global commodity prices and tighter financial conditions.
The multilateral agency’s growth projection for the Philippines next year remains at 6.3 percent.
“The Philippine economy’s growth momentum has accelerated close to its ideal growth path,” Kelly Bird, ADB Philippines country director, said.
“Strong domestic demand supported by a pick-up in employment and remittance inflows, private investment expansion and large public infrastructure projects will underpin the country’s recovery from the economic impact of the pandemic,” he added.
Meanwhile, ADB said inflation is forecast to quicken to 4.9 percent and 4.3 percent in 2022 and 2023, respectively, on the back of higher global commodity prices.
These are up from the bank’s April forecast of 4.2 percent in 2022 and 3.5 percent for 2023.
ADB also said the government is expected to sustain public spending on priority infrastructure projects under the Build, Build, Build program.
